3 Things You Need To Outperform 99% Of Entrepreneurs

Extreme force of will, extreme bias for action, and a questioning of the default speeds. It changes everything. I feel like I could rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's try. Yeah, you know, I'm on this business entertainment kick where I'm looking for content that is about business but is made to be entertaining. So it's not just like an informational video or blog post. And so there's a new show called Fight Inc. that I watched, that I thought was really good. Did you see it?

I saw the commercials for it. How do you get it?

It's on Roku, but I don't have Roku. You just Google, like, watch Fight Inc. and it's Roku. Just lets you just, it's on their website, but you don't have to sign up. You don't have to do anything. You just click and you just watch it. So, it's very cool. I mean, they basically follow around Dana, you know, behind the scenes and the UFC, like kind of the machine behind the show and the UFC. Just to put this in perspective, they basically, there is no off-season. The UFC is 52 weeks a year. Every Saturday has to be an epic show. It's a live event with pay-per-view. It's got fighters who get injured and pull out or get arrested and now they can't fight. And there's all kinds of things that can and will go wrong, but it's like the actual epitome of the show must go on. So I wanted to share with you a couple of my thoughts watching this from a founder's point of view. So, The first thing is, as silly as this sounds, I do think that Dana White is on my Mount Rushmore of startup founders. And I know he didn't technically found the UFC, but he basically did. He created the goddamn thing.

He's a madman.

Yeah. I mean, I totally agree because it wasn't like a wanted thing. We did, it was one of those products where we didn't know we wanted, and at first it was a freak show. Like, I don't know if you remember one of the more famous guys who first started fighting was this black guy who would use one boxing glove and one free hand, and he fought against like a 300-pound sumo wrestler.

He looks like a creative character in a video game. All of the people look like creative characters.

Yeah. There's one Hawaiian guy who is like a sumo wrestler looking guy, and he fought the dude with the one boxing arm. It's weird. And it was a freak show at first, but then it took like 10 years and then athletes started doing it and it became amazing.

Dana's got this great story. It was like during the cockfighting, like when people started saying that stuff and he was like, well, what do you think these athletes think? And people were like, they're, you know, maybe they're miserable. They got to go through all this pain. And he goes, let me tell you what they think. They're killers and they want to go out and like do something that is active. They need to get this energy out and they live their life like they're on heaven, like they're in heaven. And they look at your life. You just go to work at 9, you come home at 5, you sit in a cubicle as hell. These guys are free. This is what they were born to do and what they feel like they need to do. So if you take this away from them, you're hurting them way more than when they get in the ring. And I thought that was actually a pretty good spin on it.

So one of the cool things about this show is it, it, it showed a couple things. I'll tell, I'll give you the big takeaway and then some of the small takeaways. So here's the big takeaway. I said the word force of will, and I use that word, that phrase very specifically because I think it describes a certain trait of a founder. And I try to have this. I think the best founders all have this. And by the way, this comes with some trade-offs. When you have force of will, it is, as brute forcey as it sounds, it is uncomfortable to be around sometimes. You are pushing people. Maybe you're holding a higher standard. Maybe you're demanding that things are done a certain way or done at a certain speed that does not feel good to the other people that are in the organization that may be used to working in other environments where they don't have that. And so there's a little story. So basically it's like the, one of the big fights of the year is coming up in 18 days and they've done everything. They've prepped all the marketing. They've got the billboard. They show them painting the billboards at night. They show them making all the marketing videos. They show them doing all the different things that go into promoting a live show. They're selling tickets, all of this. Which fight? This was a— I don't remember which one. There was either the one where Jon Jones had to pull out, or there was the one where, um, Charles Oliveira pulled out.

Okay.

And so 18 days before, he gets a call. Fighter got hurt in his last round of his last sparring session. He was sparring without headgear. I think it's Oliveira.

This is Oliveira. This is recent.

Because one of the cousins, one of the cousins I think worked at SolarCity or whatever. And he was like, you know, we could, we could use some servers. We definitely need some servers. And he's like, All right. Sounds good.

And what'd he do? And I think the idea was like, if we just take the servers offline, they're going to have to figure out how to fix it and they'll fix it in faster than 6 weeks. I promise you that. I think that was underlying it. So Elon on the plane on Christmas Day, basically Christmas Eve, you know, they're flying to, uh, to Texas midway through the flight, just tells the pilot, turn around. We're going to go land in Sacramento. Pilot's like, okay. And then he says, hey, do you have a pocket knife? And the pilot's like, yeah, I do.

His bodyguard, his bodyguard was like, here, I got one. And like whips out this pocket knife.

Was Emmett nice about it? Was he Is Emmett a courteous person?

Emmett sort of has that like autistic forgiveness where you're like, he's not being mean about it. He's not being nice about it. He's being very direct, but you're like, he's always, that's just how he is. He's just being direct. He's just like, he's not trying to be, he's not trying to be mean. And I wouldn't even say mean is the right word. He's just trying to get to the truth and he needs you to get out of the way so that the truth can appear. He doesn't care about your feelings in the search for the truth. And in fact, the more you kind of try to get in the way of the truth, the more he's like, what are you doing? Get out of the way. We're trying to find the truth here. That's the way I would describe how it felt from my point of view. And really, like, I was rarely on the receiving end of it, but I saw it happen many a time. And I took note very quickly of like, okay, you got to come correct here.

Well, because I don't like people who are like, and I used to behave this way and I regret how I used to behave, but of like being needlessly rude. And I think that the people who are needlessly rude, I think Dana would fall in that category. Because he loves to fight. He loves to battle. So he just told this story last week. He goes, let me tell you something. I'm going to war right now with Caesars Palace. And they're like, why? He goes, for the last 6 months, I've been playing like baccarat or some like casino game with them. He goes, I'm up $17 million on them right now. He goes, I wake up in the morning and I think, how am I going to win this war today? And he goes, I'm going to lose eventually because they're going to win. But right now I'm crushing them. And each morning I wake up, I go to work, and instead of going home, or he said, he goes like, when my kids are asleep, I go back to the casino and I'm ready to go to war. And I thrive off that. He goes, I want my back against the wall and I want to go to war.

So I got to say this because I'm a, anybody who's an actual gambling degenerate, you listen to Dana's gambling story and this is only going to apply to 1% of the audience. So I apologize for the 99% who are like, who cares about this? I care a lot about this. So his story has some holes on his gambling stuff. Here's, I would like to list some of the holes that I'd like some explanation for. I'd love Dana to come on and talk about this.

He tells some of the holes, like he tells us one time that he got too drunk and he lost. He goes, I think I lost $60,000. And I wake up in the morning and they're like, hey man, you owe us. He goes, yeah, I'll get you the 60. He goes, no, no, no, no, no. It's $6 million.

Yeah. I'm not saying he doesn't admit that he loses. I just, In that interview, he said, I'm up $17 million on Caesars this year, year to date. He says, my rule is that if I make a million bucks, I walk. And if I lose, I'm willing to lose up to $6 million. Oh my God. Then he says, um, I've only lost twice this year. So it doesn't add up. How do you, if you win, if you walk away when you win a million or you lose $6 million and you're up $17 million and you've only lost 2 days of the year and it's We're halfway through the year. The math ain't mathin' on that one. Fourth thing, he represents himself as a, like, skilled gambler who beats the house. He's playing baccarat, which is like a 50-50 push game, and blackjack, where you're down 49-51. There is no skilled— like, the biggest loser in the world is a professional blackjack player. I'm just gonna say that again. The biggest loser in the world is a professional blackjack player because You're professional at something that is stacked against you, is a, by definition, losing game. Secondly, you're probably really smart and could have done so many things with your life, and you chose to play a game that is stacked against you as your professional career. And third, you're delusional because there's no such thing as a professional blackjack player. That is why that is the biggest loser job in the world.

Well, he's, but the fact that he like continues to do it, I'm not saying Dana is that, by the way, Dana's job is running the UFC.

Well, but just as a side tangent to any professional blackjack player out there, That makes no sense.

He could be a degenerate and also a great businessman. He could be a degenerate gambler and also a good businessman. Probably is.

As Michael Jordan was and many others are.

What else did you learn in that documentary or that show?

So force of will, bias to action, speed, cutting through the BS, I think is tremendous. And his other employees even said this, like the head of PR was like, she goes, yeah, work starts at 8:30. It's 6:30 right now. I'm doing my workout. But Dana just texted me saying, are you at the office yet? I told him not yet, but I'll be there soon. And she was like, Dana's going to do this press conference. Dana's the type where once he decides he's going to do something, he's like a rhino going to do it. He's going to bulldoze through and you're either with him on it and you're helping him do that, or you should just get out of the way. And I just thought, man, another really hard job. Being the head of PR for the UFC is a very, very difficult job.

And that woman is with him everywhere. I forget her name, but Londa or Linda or something, she's always with him. What you'll, you'll, what you'll notice is they do the press conferences after the fight in New York time. It's like at 2 AM and then you'll see them Monday in France for another press conference. They work their asses off.

Yeah, 100%.

Let me tell you. All right. So we talked about a company on here a bunch of times, but I actually just met the founder. So I'm going to do a little bit of a repeat. But remember how we talked about 29029, the Eversingh thing?

It's the outdoor race where you kind of run up and down a hill as many times as it takes to run the equivalent of Mount Everest. An awesome thing started by friend of the pod Jesse Itzler and, and others.

Uh, 70%?

99%. 99% of people who start a marathon end up finishing that particular race.

Not so hard then.

It's not so hard. In his opinion, you need roughly a 70 or 75% chance. He said for his events, roughly 70% of people go through with it, 30% fail. The third thing, you have to learn some type of skill, like a new skill, or acquire some type of new fitness in order to accomplish it. And the last thing, it needs to be in a beautiful place or it looks cool in photos. So I was thinking about this. Let me give you 3 ideas. For ridiculous fitness events that could work out. You ready? All right. Hit me. All right. The first one, we're going to call it the Burley Beer Mile. You dress up like Paul Bunyan. You go in the mountains on a track, near a track. You run one lap, chug a beer, run another lap, chug a beer. You do that 4 times, 4 beers, 1 mile. What do you think about the Beerly— the Burley Beer Mile?

Look, if you can give people any excuse to drink, You already have 80% of a good business. Okay. Uh, there's a reason that like Topgolf is really popular. There's a reason that people go to baseball games still. It's not because they're wondering what's going to happen in the top of the 6th. It's because they want to eat hot dogs and drink beer outside. Like giving people an excuse to drink is a great business model. If you just layer on top of that, a contrast, a juxtaposition, oh, it's fitness and beer. Love it. I'm already in. I don't know about the Paul Bunyan. I think that's a, Not sure that's on trend with the aesthetics that we're going for here, but I think if we workshop this idea a little bit, you, you could have something.

All right. How about the paddle prison break? A paddle boat race from Alcatraz to the coast of San Francisco.

The prison break. Oh, I like this one. My mind was still on the beer one for a second, by the way. I feel like just the, the beer mile or the beer, the beer marathon. It's a half marathon. And you drink 13 beers, I think has legs. Or maybe it's like, maybe it's a quarter marathon. It's 6 beers and 6 miles or something like that.

Dude, I did a, by the way, I did a beer mile in college. So you chug a beer to start, run a lap, whatever. You do it for 4 beers, 4 laps, 1 mile. I threw up. And if you throw up, you have to run a 5th lap. It took me 15 minutes to do it. It was horrible.

Yeah, but we call that the victory lap. It's like, oh, I had to do a victory lap. Why? Because I threw up during it. Oh man. You sound fun. All right, so let's do, um, prison break. So prison break is we drop you off the side of Alcatraz in a, in a small boat, a paddle boat.

We're gonna call it a paddle boat. We're gonna call it the paddle prison break.

Is there like a lane setup or we're just gonna lose people into the ocean here? What's going on? We got some liability concerns.

We're not gonna let details get in the way of a good idea here.

I think, I think there is definitely something to the prison break, uh, out of Alcatraz.

If you can do that, there's a, a swim race. That happens every year, but I'll give you my last horrible fitness idea.

You ready? We're going to call it for the Prison Break. You have to start in cuffs. Great for the photo. Adds a story, adds a challenge. You're going to have to learn and have to help each other get out of the cuffs. So everybody's in cuffs. You need somebody in this race who like can just get out of cuffs and then they'll get the little pick and they'll start picking other people out. And then that's how you get out of this.

And you have to have a criminal record in order to get invited.

You must have to have at least Uh, a little gold patch on your, on the shoulder. If you actually have a felony or misdemeanor, we'll just call you out there.

And the last horrible idea, we're going to call it the Skyline Scramble, a race through NYC, but you can't touch the ground. You got to go from building to building.

Like a parkour challenge.

Yeah, baby. The only person who survives wins. No, these are all horrible ideas. But I did think it was incredibly interesting to hear this guy's business. I didn't actually think that this company could be as good as it is, but I'll be eager to see if this thing works. I, uh, I do. I think these types of experiential businesses, I remember when I ran a conference, it wasn't the same thing, but like having a thing that you work towards and then all the people come to, it was like, it was a very fulfilling thing to do versus just being on the internet all the time. It felt nice to meet your customers and things like that. It was pretty awesome.

So you didn't give me the heads up about this, but I'm down to workshop a few ideas live for you here if you'd like.

All right. What do you got?

When you were thinking of these, what, what, what, how did you put yourself in the mindset to even come up with these ideas? What were you, what got you going?

Well, they're not very good ideas. So, uh, so whatever mindset I was in, uh, I would say avoid that. All right.

We're going to go with, um, maybe nostalgia. So, uh, the Boston Rover, it's, it's Red Rover. Remember that game Red Rover? It's, but with just all the people in the city of Boston, as many people as get on one team and we're playing Red Rover, just a citywide hide and go seek, a citywide hide and go seek. Exactly. It's not really fitness at this point. No children's games I've gone into.

It's, they're all horrible ideas, but I just thought that this segment is fascinating, dude. I think that, uh, one day I could see myself doing this.

Yeah. To make one of these.

Yeah. Yeah. Yeah. They seem awesome. It's like the, um, you know how we talked about, um, like viral food. It's like, how do you make, how do you make your restaurant go viral? Well, you need like some type of food that's either oversized or extra small or is a different color or it's typically a side, for example, uh, cookie dough.

You make it the main.

Yeah. It was like cookie dough. You make that the main thing.

Or you mash up two things that don't go together.

Or you mash up two things that, yeah. And I'm like, what could you do for fitness? And I thought it was interesting.

I think it's that same idea.

By the way, speaking of beautiful settings and doing races in memorable places, where should people be racing to right now? I think they should race to wander.com/mfm. Why should they do that?

Well, It's actually a pretty good deal here. So if you go to Wander right now, Wander is a place where you can go rent beautiful, um, luxury vacation, uh, experiences. I'm booking one right now, actually. I have my assistant working on it this morning. So, uh, if you go to Wander, they do— they're doing a special deal for MFM people, which is that if you go to wander.com/mfm, you download their app, sign up, you don't have to book a vacation or anything, you are automatically entered into a luxury vacation getaway, um, on behalf of us. And so they're going to be giving away a stay to one listener. Which is amazing. Your odds are actually pretty good. This podcast's not that popular. It could be you. There's maybe 1 in 100 chance. Who knows? So go ahead, download the app and enter to win. And if you download the app, you'll also get $300 off your next stay. So you get a discount and you get into the giveaway. But check out Wander. Dude, I was looking at some of these properties. The problem I have with Wander, I got a bone to pick with Wander, which is the pictures are so good that I started booking vacations to places I don't even want to go. I just like, normally you're like, I pick a city and then let me find a place to stay. Here I went and I was like, dude, this house is sick. I guess I'm going to Naples. Like, where am I going? I don't know. Like, I'm going to Florida now. I wasn't even trying to go to Florida.

And so, well, they're setting expectations so high. So for example, have you ever seen, um, have you ever seen like people who take pictures of the pyramids and then they zoom out and there's like hot dog vendors and there's like, you know what I mean?

Instagram versus reality type of thing.

I'm like, these photos are so freaking good. If they zoom out, is there going to be like a trailer right next to the home? Like, how are these so awesome?

No, dude, I've had people who use these for like corporate offsites because like some of these places are pretty baller. So they use it to like do a, there's like one in Sonoma. I know my friends did for a corporate offsite and they were like, no, it was sick. It was amazing. Um, there might, there has to be, I mean, these photos look so good that there has to be some version of like. Shoot for the stars and you still land on the moon type of thing. But yeah, if it's anywhere near as good as it looks, I'm, I'm very excited.

You have on this document the difference between running a business for growth versus EBITDA versus cash flow. I'm interested. You got my attention.

Yeah, this is a CEO school tactical session. When you were running The Hustle, did you— obviously all of these things are good. You want growth, you want EBITDA, you want cash flow. The problem is when you want 3 things equally, you usually get none. So they're generally in any business at any point in time, tends to be some, some order of priority. When you were at The Hustle, did you— which of these did you focus on? And was there ever a shift in, oh, now we're focusing on this instead of this?

I didn't run the business long enough. You know, we sold like 4 and a half years in to make the shift, but it was for the longest time it was revenue. Was the number one priority, followed by cash flow, followed by profit. And so what I wanted to do was double revenue every year. So I think we went from like $500,000 in revenue to $2.2 to like $5 to $12 or something like that. And we didn't make a lot of profit along the way. I think the year we sold, we did maybe $1 million in profit, but our cash flow was high. So I was able to add like $2 million to our bank account.

And explain to somebody who's like, wait, how do you have $1 million of profit, $2 million of cash flow? How does that work in a business like The Hustle?

Exactly. And so I'm in a situation right now. I have a business that, uh, my e-com business where we've been running it for maybe 4 years now. And it's doing really well. It's been, I was only growth focused. So I was like you, I wanted to double or more every year. And so we did, which the re—

the reason being is typically, not always, typically it's harder to grow revenue, but it's easier to, once revenue has grown, to become profitable.

Exactly. I think it's the right order of operations. Actually, there's one pre-step even before growth, which is just product market fit, meaning have I made something that people want? Do I feel like if I produce this that there's a market pull for this? So once we, you know, it was like verify product market fit, great. Now it was grow. I think in year 1 we did $6 or $7 million. I think in year 2 we basically got to $12 something. Year 3 was bigger than that. Now year 4 is bigger than that. So we've basically been, you know, Growing by somewhere between 50 and 100% every year for the 4 years. But I have pulled out exactly $0 from this business. I have put in my pocket $0 from this business in 4 years.

Wait, really?

Yeah. I've taken nothing outta the business. I've reinvested everything. But it's not a, oh, I could have took a ton of money outta this business. It's like, well, like for example, one year we basically had no profit. We did., you know, 8 figures of revenue and we were break-even essentially. And I was like, what are we doing here? How did this happen?

So like the bank did, but did the bank account ever go up? Like, was your, was your cash position ever good?

Well, in e-com you have one other variable, which is inventory, which sucks. The cash has been pretty steady, but the inventory assets are going up, but they're also inventory that might take a while to move. It might be slow, it might be whatever. And so you don't, I don't want my cash tied up in inventory. That is not actually the the plan, that's a, it's a byproduct.

Unless you can pay your employees and bills and inventory, it sucks.

Yeah, exactly. So I've been going through this process where I shifted from where I first was in growth and then I shifted to EBITDA. And so, um, that required a certain set of skills. So I'll share with you some of the lessons learned shifting to EBITDA first. So we, and we've successfully shifted to EBITDA.

And so we— EBITDA being, uh, earnings before interest, tax, uh, amortization, uh, Amortization and depreciation.

Exactly. Okay. So what did I do to make that shift? The first thing was— and the reason I'm saying this is because there's probably people out there who are running a business that's been high growth, low, low cash flow or high growth, low profit. And for some businesses, that's the right move. You want to stay in that mode for a very long time. Maybe it's a winner-take-all market, maybe it's a land grab situation, maybe you're venture-backed and it's a billion dollar or bust. This is not that. This is a business I own. That I, you know, if we sell this business, it might be, you know, $100 million or less is like where this thing will land. But that's great. We own the business. We have no outside, you know, investors. And so it's no big deal. So anyways, the point of this, point of this rant is basically how do you make that shift? So I first went and talked to people who, so step 1, figure out what the right EBITDA target is. So I go talk to people who are in the same space to figure out what EBITDA margin is kind of the low end of what's possible to the high end of what's possible. And then I ended up shooting for somewhere like, you know, the 60% mark, like 10 to 25%. Yeah. So for me, that's like 17% margin. So the best ones were like, yeah, we have 25%, like the e-com ones. But then you dig under the hood, it's like, oh, you don't do any marketing. Like somehow. Well, I do. So that's just not going to happen. But getting to 17, 18% is like, wow, that would be really great. And then the low end is like 10%. So that's the first thing. Then envelope, create like an EBITDA, what I call an EBITDA budget. So basically you take for every $100 of revenue that comes in, what percentage is going to go to each of the following categories? My overheads, my cost of goods sold, my OpEx, my advertising and marketing, etc. And so you create an EBITDA budget and you basically say, what, where does the dollars flow today? So you do a last 12 months look back, say we're on average every month we're spending 5% of revenue on overhead and, you know, 12% on, uh, in the e-com case, maybe it's shipping and fulfillment, whatever. So you create a current status budget and then you say, well, in order to get my margin, I need to find, you know, 8 points of extra profit margin somewhere. So where's it gonna come from? And so you start to basically pull calories from, from these different departments. All right, marketing, you're gonna have to gimme 2 points here. And shipping, you're gonna have to find a way to cut off 1 point. And you basically find the extra 8 points of margin that you're going to need.

And that stuff is, uh, it's, it's not hard to do it in a spreadsheet. It's really hard to track it on a weekly and monthly basis to make sure that it's really hard.

why are you going after EBITDA? Because so I'll mention this a little bit, but if people rag on me, I'm not like incredibly well-versed, but I've been looking into like EBITDA might be bullshit. Like, so there's this thing called GAAP, generally accepted principles, whatever. It's like what we all like abide by. There's a lot of bullshit in there. Why EBITDA versus cash flow?

You need a growth leg.

'Cause if you're not growing, the business is not worth very much. Um, you, you need profit. If you don't have profit, business is not worth very much. And then you need that profit to result in free cash flow. And if you can get all 3, you have a beautiful, amazing business. But in order, I kind of wanted to go in those 3 because again, there's not going to really be much cash flow if you're operating at a net loss. So I needed to first be making sure there's a surplus of profit. Then I needed to make sure that surplus of profit is resulting in free cash flow.

And you just so happen to be in an industry where those EBITDA and cash flow things, they're really hard. It's really hard, like to figure out the inventory and stuff like that. That is a science. I, uh, I am not envious of people who go through this.

My major takeaway is e-com is a terrible business to be in.

Um, and when is it not a terrible business?

Who do you think is winning in e-commerce and what attributes do they have?

Shopify?

Facebook? No, I mean, of course, of course, of course. Retailers, uh, D2C, whatever you want to call it.

But only for certain categories, I would imagine. Is it only for things where young people are using? Nope. That's amazing. That's ridiculous.

Right? Let's move on. I've said too much.

All right. I want to talk about one thing that you actually had on here that I have no idea. Like it's, it's way out of character for you. Your dream house, or do you want to do painted chickens?

Well, I don't have much to say about the dream house except for, dude, look at this sick house. That's the entire topic, but let's go there. It's an amazing house. This is a house that, uh, this guy on my team, uh, sent me and I can't believe it. It's the most beautiful house I've ever seen in San Francisco.

It's 11,000 square feet, estimated market value, $23 million. And it's on the ocean in San Francisco.

I mean, there's just a few photos. So this house is first to get an 11,000 square foot home in San Francisco is very, very hard to do. Every view is like the Golden Gate Bridge. You're right on the water. You're right on the ocean. But even if you didn't want to go in the ocean, well, guess what? You have an infinity pool in the back that just is spilling over into the Pacific Ocean. On top of that, there's one photo in here that I just have to show you.

I see a beautiful porch that's overlooking the San Francisco Golden Gate Bridge.

Next photo, 24.

Like a wine cellar that is big enough that it was bigger than my childhood bedroom. 25. A huge home theater that looks like they're just watching like some type of nature documentary. So awesome.

They're sitting— and here it is. The reason I want this home to begin with. 26.

A half-court basketball court with all windows where you can see the Golden Gate Bridge. This is awesome.

Is this floor-to-ceiling, like 25-foot ceiling, all glass window? You're seeing— you're looking at the ocean, the breeze. It's all— there's a glass door that's open. You see the Golden Gate Bridge. And you have a beautiful basketball court inside your home with all, all this light wood that I just love. Oh my God, this is crazy, dude. This house is unreal. I must buy this house. It's not for sale, so that's the first problem. Um, but besides that, I am, I now have a target. I now have a desire, you know, I thought I had enough money. Now I have a desire. I need to be able to drop $30 million on this house.

Dude, in order to buy a $30 million home— oh, check this out though. Okay, so it was owned by Sharon Stone. Before that, or after that, do you know who owned it? A dentist. A dentist owned this house.

What the hell?

Yeah, it says this guy was a dentist. In order to buy a $30 million house, you—

I'll tell you how much money I need. $28 million, and then I'm gonna borrow $2 million, and I'm gonna buy this house with every dollar I own, and that's it.

No, I think you need— I think you need $100 million to buy a $30 million house. Would you say that's accurate?

Probably at minimum.

Yeah, at minimum.

The maintenance, the taxes on a house like this is going to be pretty insane too. Like, your carrying costs are going to be what, half a million to a million bucks a year?

Yeah, it could be. No, it doesn't. Well, it could be that it would be that high, probably because you're on the coast and you got the sea.

Taxes alone in San Francisco of this, on this house, is going to be like quarter million to $300,000 a year. That's just the property taxes. So all the maintenance, all the insurance, all the all, all the cleaning, all that stuff on top of this thing has got to be at least another quarter million. So at least half a million bucks.

Yeah, that's insane. That's insane. This is a— it's a sick house. The, uh, the last thing I wanted to ask you about, you said you wrote some essay.

Yeah, your boy's getting his Paul Graham on. I started writing essays.

Why?

I told you, I'm just in a creative season and I wanted to, to do different things. I like writing and I was like, well, what do I want to write about? And I realized I want to write about the stuff that I'm I'm curious about, or whenever I feel like I have a golden insight. So something that, anything that feels insightful to me, I want to be able to write it down. And why do I care about that?

You want to spread your seed, baby. You got to spread that seed.

Well, that's part of it. But I actually, the bigger part is I've known, uh, there's this feedback loop that happens, which is once you have to deliver something, you start to look for it. Meaning when we start this podcast and let's say every week we got to do this podcast. And when you show up to this podcast, you got to have 3 interesting business things to say. Right? You need to have 3 interesting business topics. And in order to do that, your brain starts to now go see interest, go find interesting business topics, starts to ask a few more questions, start to write a few more notes, starts to pay a little more attention. And this wonderful feedback loop gets built where you start getting smarter about business more because you have this outlet where you gotta go put it and you're on the hook to go put it somewhere every so often. So in the same way, one of my favorite things is to learn something new, right? I'm a, just kind of like a, a, learning junkie, right? Well, what, by having a place to go write it, I now am hunting for more insightful things. I'm reading more. I'm talking to people more. I'm having more, you know, connections between two different ideas that are disconnected. And so that's the real reason. Because the thing I shared with you, I haven't even published yet. I'm going to publish all these on my website, just, uh, seanperey.com. But right now this one's on a Google Doc. I'll throw it up after, after this so that it's at least online. So the essay is called Painted Chickens and, uh, or Painted Chicken. And the reason it's called Painted Chicken is because, have you ever been inside of a Subway? Do you eat Subway?

When I was a kid, yeah.

And so I like Subway, I admit it. But Subway, the quality has gone like way down since I was a kid.

And I can't tell, has the quality gone down or have our tastes gone up?

No, the quality's gone down. You know how I know this? Do you know all the controversy with Chipotle right now?

No.

No, dude, like Gen Z hates Chipotle. Why? So basically this thing started trending on TikTok. There's like Chipotle, uh, jipping you on quantity. Okay. Or just like, you know, basically like the way that this, like Chipotle used to be bomb. Now it sucks. Here's why. And different people have different reasons why the taste, but one of the big ones is like, they're just skimping on the, on the thing. And so then the CEO came out and did this hilarious thing. You didn't see this?

No.

It's so funny. The CEO came out and he goes, Oh man, look, if you go into a Chipotle and, uh, you want a little bit more, our guys are great about this. Just, you just give them the look. And he does this like stupid look. He's like, you do that, our guys are, and girls, and girls, our guys and girls are great at, at, at hooking you up with this. And so there's all these memes now of people being like, yeah, when I go into a Chipotle and I make this face, like their reaction are just like, they're not like, I got you bro, let me hook it up. And these, and they're like also impersonating him where they're like, when you go into a Chipotle and you give the look, our guys and girls and trans and Black people too, they're all great at doing this. And people are making fun of this CEO for flubbing this speech that he gave. So anyway, Chipotle is under the microscope right now.

Well, now they all like Kava, which I just went to. It's awesome.

Yeah, they like Kava. Well, one of the reasons— so then the founder of Chipotle, I think, came out, or somebody who was like the ex-CEO came out. And he said two things. He goes, it's insane that people think, uh, we would tell our staff to, uh, like skimp on portions. That's terrible for business. Like we've tested this. The thing you do for business, if you want to grow revenue and grow profits in a store, is you give people bigger portions, which makes them love the place and come back. Sales go through the roof and waste also goes down because you're giving them the food versus throwing it away. If you actually want to save on food waste, it's not by doing less portions. It's by having more customers first so that you sell through all your food. That's the way you reduce food waste. It's not by skimping to customers and then they don't come back 'cause they're angry, right? He's like, that would be counterproductive. The second thing that came out was the guy said basically when, uh, Chipotle had all those E. coli scares, they had to change their whole supply chain. I don't know if you remember this, like there's a couple years ago where like 2, 3 times, like, whoops, whoops again. Oh, E. coli again. Sorry about that. So they changed all of their operating procedures. So what they used to do was In the store, in the back, they, that's where they would, you know, chop the veggies right there. They would do whatever. Now it all comes pre-bagged, sealed from like a central headquarters where they can have really tight food safety, vacuum seal it or whatever, ship it to the store. Store just has to open it. They're not doing the food prep on site. Well, the result of that is the food tastes less fresh. And the result of that is that they go and say they cut down the number of suppliers they were working with because it was too much risk. So instead of local produce, local farms for the meat, They now started going to a few vendors that are now shipping out much farther distances and maybe are more mass production, less, less taste. So the taste actually has gone down, not just the taste buds because of the supply chain changes.

So they need to, they need to, I mean, bring back E. coli or whatever it was like.

Yeah, dude, let's roll the dice. Let's live a little, right? Like, the food's got to taste good. Who cares if you get sick once a year?

Which is insane if they sell, if they serve millions of customers when it's like 4 people. You know, that is, that's like statistically insignificant, I would imagine.

Which is always the worst argument. Like whenever one of these social networks, they're like, dude, do you realize like they're getting hammered by Congress? And all they want to say is there's 2 billion monthly active users. How many people are in your state? How many murders are there in your state per day? Do I blame you? No. I run a state 100 times bigger than yours. Like they can't say that, but that's the reality is the law of large numbers. If you're Facebook, literally. Anything that can happen is going to happen on your platform every single day. That's just the rule of statistics. Even the most like oddest, strangest, most screwed up behaviors are going to happen because it's so many people.

It's insane.

Yeah.

And so now they've had to change this whole thing. But what was your essay about then?

Yeah, I loved it.

You, like, I think you've heard that. Everybody's heard that phrase by now, right? So I said, hmm, move fast and break things. Like, okay, that's great. Is that popular because Facebook is popular? Like maybe it's just a popular value 'cause Facebook was so popular. All right, that's theory one. Well, Sam, what's, uh, what's Microsoft's core value? What's Microsoft's move fast and break things?

No idea.

I have no idea. Twitter, Lyft, Uber, pick any of these companies, right? Do, do you know any, any of them? Like, nope, we don't know any from any of them. In fact, the only other one that I could remember Like move fast and break things was Google's. Do you know what Google's is?

Do no evil. Yeah.

Don't be evil.

Exactly.

Don't be evil.

Um, but then it got, it got silly because they maybe did a little evil.

Well, exactly. So then I was thinking, well, here, what, what, what is it to learn from this? So the first thing I learned is maybe these are memorable because they're catchy, right? Maybe that's the first thing, which is that instead of just saying integrity, you should, um, you should say don't be evil. Don't be evil is more provocative. It's more catchy. It's more interesting. Than integrity or honesty or be good, right? If they just said be good versus don't be evil, none of us would remember that Google's value is be good. But a lot of us paid attention when they said our value is don't be evil. So I think there's something to lesson one is if you make it provocative, you make it memorable. If you make it memorable, people might actually use it. So that's the first, first little takeaway. The second is, well, there are other catchy rhyming things. You know, there's, you could just try to be catchy like the, the quicker picker upper. That's, that's cool. But why does, why does move fast and break things have a little bit more weight to it? I think it's because it, you have to pay the price, right? So you gotta pay the cost to be the boss. And what I thought was interesting was if I went to 100 CEOs of Fortune 500 companies and I said, hey, we think that it, you should, you're, the company should move fast. That speed is an important value. Speed's important, right? Moving fast. Would you say that's a value for your team? Of course, 100 out of 100 would nod their head and say, yep, of course, definitely. We value speed. Awesome. And if you said, well, when you move fast, naturally, sometimes things might go wrong. You might bump into some things, you might break some things when you're moving so fast. So let's agree that it's actually, it's going to be move fast and break things. How many of the, out of the 100 would now agree? And the reality is that 99 would be chicken shit and they would be like, well, no, no, no, we're not trying to break things around here.

It depends. It's speed without breaking breaking things.

Dude, that's insane. I mean, what an insightful person to— I mean, he's just like an eloquent guy for how young he was. I mean, that's a, that's a, that's a really good quote.

First, that's awesome. Second, while you're on this little like value-driven, mission-driven company, Quest. Have you heard of this company called Brunello Cucelli? You probably haven't because it's not your shtick, but they make—

opera singer? Who is that?

No, it's this Italian company that makes really expensive cashmere clothing, and their most famous thing is like, uh, sweaters.

So it's— I'm wearing a free t-shirt made out of 100% polyester from a YouTuber, bro.

Yeah, these guys are on top of it. Now, I like them. Uh, I don't know if I want to spend like I'm looking at $1,500 for a polo. I don't know if I'm there yet, but I'm definitely thinking about it. Maybe I'd buy it. Maybe I'd buy a $2,000 sweater. But like, everything they have is high-end. Like, it's one of those—

he wants to attract a good customer. And I think he's repelled me successfully. I would not be a good customer of this. But you know what's cool? You said his schedule, light supper. Light supper. I don't think I've ever had a light supper. I'm eating heavy dinners over here. And I just realized, just changing the words. If I said, if I just changed my words, I said, okay, what am I going to have for my light supper tonight? I bet that would fix my diet. Just that one. You change your words, you change your life. I bet you if I just changed that one word, light supper, it wasn't even in my goddamn vocabulary until just now.

Yeah. Uh, thank you. I'll be taking that. Um, is that it? Is that the pod? That's it. All right. That's the pod.

I feel like I could rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel, never looking back.